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252 PART 3 • STRATEGY IMPLEMENTATION

Strategies have no chance of being implemented successfully in organizations that do not
market goods and services well, in firms that cannot raise needed working capital, in firms
that produce technologically inferior products, or in firms that have a weak information
system. This chapter examines marketing, finance/accounting, R&D, and management
information systems (MIS) issues that are central to effective strategy implementation.
Special topics include market segmentation, market positioning, evaluating the worth of a
business, determining to what extent debt and/or stock should be used as a source of capital,
developing projected financial statements, contracting R&D outside the firm, and creating
an information support system. Manager and employee involvement and participation are
essential for success in marketing, finance/accounting, R&D, and MIS activities.

The Nature of Strategy Implementation

The quarterback can call the best play possible in the huddle, but that does not mean
the play will go for a touchdown. The team may even lose yardage unless the play is
executed (implemented) well. Less than 10 percent of strategies formulated are success-
fully implemented! There are many reasons for this low success rate, including failing to
appropriately segment markets, paying too much for a new acquisition, and falling
behind competitors in R&D. Johnson & Johnson implements strategies well.
Strategy implementation directly affects the lives of plant managers, division
managers, department managers, sales managers, product managers, project managers,
personnel managers, staff managers, supervisors, and all employees. In some situations,
individuals may not have participated in the strategy-formulation process at all and may
not appreciate, understand, or even accept the work and thought that went into strategy
formulation. There may even be foot dragging or resistance on their part. Managers and
employees who do not understand the business and are not committed to the business may
attempt to sabotage strategy-implementation efforts in hopes that the organization will
return to its old ways. The strategy-implementation stage of the strategic-management
process is highlighted in Figure 8-1.

Doing Great in a Weak Economy. How?

Johnson & Johnson (J&J)

ounded in 1886 and based in New Brunswick, New
FJersey, J&J produces a wide variety of health-care
products, ranging from baby powder to Listerine to joint
replacement parts to pharmaceutical drugs. J&J is a
gigantic well-managed company that pays the fifth
highest dividend amount annually of any firm in the
world.
Among all the corporations in the world, Fortune
magazine rated J&J as number 5 on their 2009 “Most
Admired Companies” list. J&J’s revenues for 2008
increased from $61 billion to $63 billion when most firms
endured revenue decreases. Also for calendar 2008, J&J’s